Canadian mining company, Bear Creek, may get some help in getting its Santa Ana silver mine off the ground from the Peruvian government which said it hopes to help local opposition to the project.

Energy and Mines Minister Eleodoro Mayorga told Reuters that officials are rapidly building support for the project in indigenous Aymara communities and that Peru hopes to be able to allow the company to eventually restart work.

In 2011, Bear Creek’s rights to build the mine were revoked after protests against the proposed mine in southern Peru turned deadly.

The company has said the project's suspension violates investor protections under Peru's free trade agreement with Canada. Bear Creek announced it started arbitration proceedings in case talks with the government do not produce an agreement.

The company had planned to use Santa Ana to help pay for its bigger, $700 million silver project in Peru, Corani. Bear Creek expects Santa Ana to produce some 139 t/a (5 million oz/year) of silver per year and Corani to produce about 362 t/a (13 million oz/year).

Chief executive Andrew Swarthout said in an email that the company would consider calling off the arbitration process if it received "a good signal that we would be making progress towards a resolution."

He said the company cannot disclose how much it was seeking in damages for Santa Ana until its notice of arbitration has been accepted by the World Bank's arbitration panel in Washington.

Mayorga said he thinks the dispute can be resolved soon.

"I see it with a certain optimism," Mayorga said in an interview. "If we manage to resolve the social license in time, we will be on our way to developing" the deposit.

But without strong local support, Mayorga said the project will not go forward, and "Peru would be subject to paying the company."

Local residents in southern Peru's Puno region once staged large protests against Santa Ana because of fears the project would pollute water supplies.

Swarthout said the situation has changed.

"The communities have voiced their desire to at least hear our proposed project and outside radical influence has diminished," he said.
Peru is the world's third biggest copper and silver producer and fifth biggest gold producer.